Earlier this week Chief Judge Leonard Davis entered two key orders in the Wi-Lan litigation dealing with how pre-AIA cases are handled as far as severance and consolidation for trial which may be of interest to practitioners.

Wi-Lan initially
brought suit against eleven defendants prior to enactment of the AIA. An
initial motion to sever was denied. Four defendant groups now remain in
the case, and one of these remaining defendants HTC file a renewed motion to sever, notingIn re EMC I, which was decided
after the Court denied the initial motion to transfer.

Severance - FRCP 20

Judge Davis quoted In re EMC'sholdings that
"joinder is not appropriate where different products and processes are
involved", "independently developed
products using differently sourced parts
are not part of the same transaction [requirement of FRCP 20], even if they are coincidentally
identical", and the "mere fact that
infringement of the same claims of the same patent is alleged does not
support joinder, even though the claims would raise common questions of claim construction and
patent invalidity." However, he noted, "the Federal Circuit also made
clear In re EMC is not an absolute bar to joinder. Rather, "the fact that
the defendants are independent actors does not preclude joinder as long as their actions are part of the
'same transaction, occurrence, or series of transactions or occurrences.'" In re EMC,
677 F.3d at 1356. The "transaction or occurrence" test is applied on
a case-by-case basis "based
on a flexib[le] . . . standard [that] enables the federal courts to promote judicial economy by permitting
all reasonably related claims for relief by or against different parties to be tried in a
single proceeding under the provisions of Rule 20." Id.

Judge
Davis then noted that In re EMC requires both: (1) products or processes
that are the same in respects relevant to the
patent; and (2) an “actual link between the facts underlying each claim of
infringement" citing In re EMC and Judge Gilstrap’s recent opinion in Negotiated
Data Solutions v. Apple, Inc., 2012 U.S. Dist. LEXIS 174839, *6 (E.D. Tex.
Dec. 2012). (How helpful - now we have cases to cite to from both Marshall and Tyler).

Here, HTC argued that the parties’
accused products — base stations and
cell phones — are different. “Though there are two different categories
of products,” Judge Davis observed, and they do have “general differences”, both
categories are involved in wireless data transmission and “their accused
properties—specific communication methods—are tightly interrelated … [and] “[i]t
is the method of communication that is the domain of the patents in suit.”

But commonality of accused
products or processes is not enough, the Court continued - in fact the presence of even identical
products is not enough under In re EMC. There must also be an “actual link” between
the facts underlying each claim of infringement. Relevant factors in considering whether
joinder is proper include:

the temporal proximity of
alleged infringement;

the relationship among
defendants;

the use of common components
in the accused products;

licensing or technology
agreements between defendants;

shared development and
manufacturing; and

whether the damages sought
are based on lost profits.

Id. at 1359–60. After considering these factors, Judge Davis concluded that the “actual links”
in this case were insufficient to satisfy this prong of the analysis.

First, though infringement is
ongoing as to all defendants and is thus occurring during the same time period,
the hypothetical negotiation dates are significantly different. Second, some
licenses exist between HTC and other defendants, but HTC asserts—and Wi-LAN
does not dispute—that the licenses are unrelated to the technology at issue.
The only factor that favors joinder is the fact that there is a common component
in the accused products. Non-party Qualcomm supplies chips used by both HTC and Sony in most
of their accused handsets. These chips include software that provides some of the
functionality that is pertinent in establishing infringement. These identically sourced components are a
link, but not a sufficient link to require joinder in light of In re EMC.

Consolidation - - FRCP 42

Okay, so the plaintiff's claims against HTC are severed into a separate cause of action. What's next? Amazingly, another order - this time a ruling on the parties' proposed trial plan for this case. Responding to the Court’s
order to submit proposed a proposed trial plan, plaintiff Wi-Lan proposed (1) one
trial with all four defendants or (2) an invalidity trial first followed by a
liability and damages trial against Sony and HTC, and then a liability and
damages trial against Alcatel and Ericsson. Alcatel,
Ericsson and Sony agreed to a single trial, but requested more time for that
trial than Wi-Lan proposed. HTC pointed
to its Motion to Sever (see above) and requested a separate trial from the
remaining defendants. After hearing argument from the
parties, the Court offered HTC the option of a separate trial on infringement
and damages if it would agree to try the issue of invalidity along with the
other defendants in the first trial. HTC did not accept the Court’s proposal,
contending that under EMC and its progeny, it is entitled to a separate
trial on all issues.

In his trial plan order, Judge Davis reviewed the rules
dealing with consolidation and bifurcation, quoting the Federal Circuit’s
statement in EMC that “[i]n exercising
its discretion, the district court should keep in mind that even if joinder is
not permitted under Rule 20, the district court has considerable discretion to
consolidate cases for discovery and for trial under Rule 42 where venue is
proper and there is only a ‘common question of law or fact.’” The Court
concluded that “[t]hus, even if joinder is improper under Rule 20, the Court
has discretion to consolidate cases for trial where—as here—it is an appropriate
use of judicial resources and would not unduly prejudice a party.”

The Court then addressed the issues raised in trials in multidefendant cases. "The Court has handled numerous multi-defendant patent cases over the years and always strives to balance the interests of all parties involved when fashioning a trial plan," he began, providing brief summaries of the individual trial plans in the CEATS, CSIRO, Fractus, Bedrock, and Eolas multiparty trial plans. (In case you had not guessed, this is not Judge Davis' first day at this particular circus. Or as one wag put it, "same circus, different clowns.") "If separate trials are the best way to handle a case, the Court will set multiple trials. The Court has previously articulated a number of factors it considers when deciding whether multiple trials are, and
the relevant factors to be considered in crafting each case’s trial plan appropriate. CEATS, Inc. v.
Continental Airlines, Inc., et al, 6:10cv120, Docket No. 888. (“the CEATS factors”). While
no single factor is dispositive, the following factors are considered in balancing the equities to all
parties involved:

number of defendants;

number of patents;

number of asserted claims;

complexity of the technology
involved;

similarity of functionality
of accused instrumentalities;

consistency of plaintiff’s
damages model against distinct defendants, e.g., single expert report as to all
defendants, how distinct is the theory of infringement and damages in the expert report as
to individual defendants, etc.;

consistency of defendants’
non-infringement, validity, and damages positions, as exemplified by, among other
things, expert reports, e.g., single or multiple experts on non-infringement; single or
multiple experts on validity, single or multiple experts on damages, etc.;

Id. As always, the Court noted, "the overall consideration is finding an equitable and fair trial plan for all parties—which inevitably requires
compromise." Here, Judge Davis concluded that the
balance of the CEATS factors favored a single trial.

"The case involves two related
groups of defendants with similar and interrelated products, common asserted
patents, and overlapping experts with similar theories as to infringement,
invalidity, and damages. If the Court adopts HTC’s proposal, the jury in trial
one will hear from all of Wi-LAN’s witnesses, Mr. Lanning, two damages experts,
and three separate infringement experts who will all give similar opinions. Then
the jury in trial two will hear from all of Wi-LAN’s witnesses (who would have
to be presented a second time), Mr. Lanning again, Mr. Bakewell again, and
another infringement expert who echoes the opinions offered in trial one. Tr.
at 54:19–20.

At the hearing, the Court asked
HTC to articulate the prejudice it would suffer from a combined trial. Essentially, HTC’s
argument was that much of the trial would be inapplicable to HTC. After reviewing the common
issues and witnesses, this argument is not compelling. Additionally though, HTC did not
articulate one of the real prejudices the Court sometimes sees in a multiple defendant trial.
For example, HTC is not in a position where it is lumped into a trial with other defendants who
are accused of willful infringement when it is not. Willfulness is not an issue in the case. Nor
does HTC point to significantly different damage amounts, where one defendant is accused of a
dramatically larger damages number, which might prejudice the other smaller defendants.

Despite the Court’s belief that a
single trial is justified, the Court offered HTC the following option:

THE COURT: Well, then in which
case let me make this proposal to you: What if I were to give HTC the option of
you can either go in the first trial with the other three defendants as to both
infringement and invalidity, or you can go in a second trial as to
infringement; but you will agree to be bound by the invalidity finding in the
first trial?

HTC refused to be bound by the
first invalidity finding, even if it were allowed to participate in the first
trial as to invalidity. It seems then, that HTC wants Defendants to have multiple
bites at the invalidity apple. That is a waste of judicial resources and risks
inconsistent verdicts."

“For these reasons,” the Court
concluded, “the Court exercises its considerable discretion in consolidating
cases for trial under Rule 42 and ORDERS that HTC is consolidated with
the remaining defendants for trial. These cases will proceed to the jury as a
single trial on all issues and as to all parties.

Last week while I was courting danger on a cruise ship in the Caribbean (read the news - it's a dangerous activity these days) during my boys' spring break, the lawyers in the VirnetX v. Cisco case were spending a presumably less stressful few days concluding their trial.

As I posted recently, this is the second VirnetX trial in Judge Davis' court, and this one concluded on a happier note for the defendant, with the jury finding that none of the twelve asserted claims were infringed, but that Cisco had failed to prove by clear and convincing evidence that the ten claims alleged to be invalid were in fact invalid. The damages question was answered as zero, and the jury did not answer the questions regarding willful infringement (the subjective prong only, since objective is now an issue of law for the Court) since it was conditioned on a finding of infringement.

Judge Davis conducted the jury trial in this case, at the end of which the jury found that Samsung infringed the asserted claims, that the claims had not been shown to be invalid, and awarded $23.12 million in damages. Fractus then requested a permanent injunction or in the alternative a royalty rate of $1.06 per phone. Judge Davis denied the request for an injunction, gave the parties an opportunity to negotiate a license, and when they did not, set an ongoing royalty rate of 60 cents a phone.

To provide some metrics, Fractus argued that the Read factors warranted a higher royalty rate than the implied rate of 35.5 cents found by the jury due to changed market circumstances. Judge Davis noted that he previously enhanced the jury's verdict by 1.65x, which translates into an ongoing royalty rate of $.59 per phone. "Considering Samsung's post-verdict conduct and the Court's prior enhancement of the verdict," Judge Davis concluded that an ongoing royalty of $.60 per phone on all adjudicated models was proper.

GALADRIEL: Even the wisest cannot tell for the mirror shows many things. Things that were. Things that are. And some things... that have not yet come to pass.

The Fellowship of the Rings (the movie, not the book)

Well, it's mirror-watching week for VirnetX again in Tyler, as Judge Davis gets its case against Cisco underway. This post, however, recaps the final outcome of its last trial, against Apple in November, which resulted in a lengthy (47 pages) order from Judge Davis last week resolving the various postjudgment motions. (And you know how much I like JMOL rulings).

The bottom line is that VirnetX' $368.16 million verdict against Apple stood, with interest tacked on, but it did not get an injunction shutting down Apple's FaceTime application (my connection speeds pretty much do that anyway most of the time, so it's not like I'd notice). Apple's JMOL, new trial and remittitur motions were denied, VirnetX's motion for postverdict damages and pre and postjudgment interest was granted in part, and its motion for an injunction was denied, with the customary severance for ongoing royalty instead. VirnetX also sought attorneys fees and judgment on Apple's "late-abandoned counterclaims and defenses, including all of Apple's Alleged Prior Art References" both of which were denied.

With respect to the request for attorneys fees, Judge Davis noted that VirnetX argued that Apple’s alleged litigation misconduct and the application of some Read factors made this case exceptional. Specifically, VirnetX claimed that Apple disregarded the Court’s orders on several occasions, urged meritless defenses, concealed its primary infringement defense until the eve of trial, contradicted prior representations it made to the Court, failed to comply with the local rules during discovery, and generally "acted like a knave."
(I'm thinking that maybe the word was different in the first draft - so glad it was corrected to a term that is so commonly used locally. I can't tell you the number of times I've been on a call or in a deposition or hearing and just thought, "gee, what a knave.").

Well, as compelling and persuasive as the language was, it was really more like a pair of sixes, Judge Davis concluded. "Although Apple failed to always act as professional as this Court expects," he wrote, adding parenthetically (okay, actually in a footnote) that the litigious nature of these proceedings "does not excuse a party from acting with the courtesy and respect one should afford a fellow professional," he found that the misconduct did not rise to the level that warranted the award of attorneys’ fees.

"There is little, if any, evidence that Apple intentionally disregarded this Court’s orders or explicitly contradicted statements it made to the Court. Apple was guilty of misconduct when it improperly terminated a deposition, however, Apple has already been sanctioned for this behavior. As to Apple’s other incidents of “egregious” behavior, it does not appear that Apple acted in bad faith. At best, VirnetX cites to some occasions of rude behavior, but this alone does not support declaring this to be an exceptional case."

VirnetX also wanted judgment on all of Apple's invalidity defenses and counterclaims, including prior art references that were asserted up to the time of trial, but not at trial. Judge Davis rejected this request as well:

The Court cannot and will not enter judgment upon claims and defenses that were not presented for consideration to the jury. There is no basis to enter such a judgment, no more than there is a basis to enter judgment of non-infringement for Apple as to VirnetX’s unasserted claims. The Court encourages and requires the parties to narrow their case for trial. Accordingly, the Court will not penalize such attempts to narrow issues by entering judgment on issues not presented at trial.

This patent case involves two defendants, Google and Skyhook (what a shame it isn't Skyfall, so I could load this post with Bond references), who are adverse in other litigation. One defendant, Google, asked for a severance from the rest of the defendants, including defendant Skyhook as a result, and plaintiff opposed. Judge Davis agreed with Google's position:

Google’s position in this lawsuit is distinguishable from an ordinary situation where two competitors are joined as co-defendants. Google and Skyhook are more than competitor co-defendants—they are also adversaries in another lawsuit involving similar technologies and patents as the present suit. Skyhook also has pending patent applications claiming priority to patents asserted against Google in the Massachusetts Suit. This creates a very real threat that Skyhook will (even unintentionally) use confidential information obtained from Google in the Texas Suit during prosecution of its pending applications. There is also a threat that Skyhook will use confidential Google information obtained in the Texas Suit against it in the Massachusetts Suit.
This conflict puts Google between Scylla and Charybdis. It must choose between: (A) sharing information with Skyhook to benefit the Texas Suit at the expense of the Massachusetts Suit; or (B) withholding information from Skyhook to benefit the Massachusetts Suit at the expense of the Texas Suit. Google’s untenable position can be mitigated by severance from the remaining Defendants. See F ED. R. C IV. P. 20(b) (stating a court may order separate trials to protect a party from prejudice).

Judge Davis also held that severance was proper under FRCP as interpreted by In re EMC anyway because the case involved different products or methods of infringing in a similar manner.

Notably, Judge Davis did not consolidate the severed case with the other cases for pretrial. "Because of the inherent prejudice to Google resulting from its concurrent lawsuit against Skyhook," he wrote, "the Court will not consolidate Google with the remaining Defendants for pre-trial under Norman IP. See Norman IP Holdings, LLC v. Lexmark Int’l, Inc., 2012 WL 3307942 (E.D. Tex. Aug. 10, 2012) (Davis, J.).

It's been a slow month for patent cases this month in the Eastern District, but yesterday a Tyler jury in Chief Judge Leonard Davis' court changed that with a verdict of $368,160,000 against Apple in VirnetX v. Apple, 6:10cv417. All sixteen claims across the four patents were found infringed, and none were found invalid.

Two defendants filed motions to strike the plaintiff's infringement contentions, which were nearly identical and which Judge Davis found presented the same legal issue.

Importantly, Judge Davis noted that the parties disputed the exact nature of the products and services that the plaintiff accused of infringement. The plaintiff contended that the accused instrumentality was each defendant's "location – based platform" while defendants argued that the accused instrumentalities were their "location – based services." Essentially defendants believe that the plaintiff accused several of their products of infringement, while plaintiff argued it accused the entire platform that the defendants used to facilitate these services.

This basic disagreement gave rise to the dispute in that because the plaintiff believed that it accused a single instrumentality of infringement, it disclosed a single claim chart to each defendant for that defendant's location – based platform. The claim charts referred to defendants' location – based services, but they did not include claim charts for each individual location – based service. Defendants filed a motion to strike the contentions, claiming that they violated the local patent rules because they did not provide separate claim charts for each accused instrumentalities. Judge Davis disagreed:

The local patent rules were adopted to ensure each side has the information necessary to litigate its case. Under the local rules, a plaintiff’s infringement contentions must set forth its specific theories of infringement. Infringement contentions must contain enough specificity to provide defendants with notice of the plaintiff’s infringement theories. However, infringement contentions do not need to meet the level of detail required for a motion for summary judgment; infringement contentions “are not meant to provide a forum for litigation of the substantive issues.”TracBeam’s Infringement Contentions, proposed amendments, and the resulting correspondence between the parties give Defendants sufficient notice of TracBeam’s theory of infringement. The Infringement Contentions articulate TracBeam’s specific theory of infringement against AT&T and Cellco-TracBeam accused Defendants’ respective “location-based platforms” of infringement. Each individual location-based service operates within the larger context of Defendants’ location-based platforms. Since the accused instrumentalities are AT&T and Cellco’s overall location-based platforms, it would be improper to require TracBeam to submit individual claim charts for each location-based service. Instead, TracBeam’s Infringement Contentions satisfy the local rules.

(Internal citations omitted).

Yea, even as I type this another order in this case just crossed my desk in this case in which Judge Davis denied an intervenor's motion to dismiss the plaintiffs allegations for failure to state a claim of willful infringement. So this post will be an uncredited double feature of sorts.

The intervenor's argument was that the plaintiffs willful infringement claim should be dismissed because the allegations in the plaintiffs pleading were insufficient to demonstrate that it acted despite an "objectively high likelihood its actions constituted infringement." Judge Davis concluded that the allegations were in fact sufficient. Next the intervenor argued that the allegations failed to allege willfulness before the lawsuit was filed. Judge Davis concluded that the plaintiff was permissibly advocating that the action between the intervenor and the plaintiff commenced when the intervenor joined the case one year after its filing date.

Well, dammit, here's another one. In this order, Judge Davis granted the defendants motion for leave to amend their invalidity contentions and denied the plaintiffs motion to strike those same contentions.

"These two motions boiled down to a dispute over five prior art references," Judge Davis writes. These five references were part of 10 which were not accompanied by charts identifying where each claim term was found in that reference in the defendants' original invalidity contentions. On April 4, 2012 the plaintiff moved to strike the 10 uncharted references, and defendants countered by seeking leave to amend their contentions to add charts for the references. Judge Davis denied the motion to strike and granted the motion for leave to amend noting that "[b]ecause of the unusual procedural history of this action" invalidity charts for the five references had already been properly and timely disclosed to the plaintiff because they were contained in the invalidity contentions served on the plaintiff by two intervenors. See above.

The plaintiff argued that the defendants should not be allowed to amend their invalidity contentions because they failed to meet their burden to establish diligence, and because it would suffer prejudice because if the intervenors settle, their invalidity contentions would no longer be part of the case. Judge Davis disagreed, noting that the defendants did not seek to add any new prior art references, and that the charts in question had already been disclosed. "This is not a situation where TracBeam will have to prepare for new invalidity arguments at an advanced stage of litigation. Rather, TracBeam will simply have to address duplicate arguments from additional parties." Accordingly the motion for leave to amend was granted

Hard to believe, but there is yet another opinion on a motion to dismiss citing Twombly this week - this time from Judge Davis. To cut to the chase, Judge Davis held that both the plaintiff's direct and inducing infringement allegations were insufficient, but gave two weeks for the plaintiff to replead.

With respect to the allegations of direct infringement, Judge Davis held that they did not adhere to Form 18 because they did not identify any accused products, services, methods, or other infringing acts for the patent-in suit. "While Klausner alleges each Defendant provides a “Voice over Internet Protocol (VOIP) messaging service having some . . . visual voicemail capabilities,” Klausner failed to assert how these products were infringing, and the product identification is not specific to any particular Defendant," thus providing an example of when an identification of the accused activitiy isn't sufficiently like the "electric motors" identified in Form 18.

As to the indirect infringement, Judge Davis held that the allegations failed to state a claim that was plausible on its face. "In order to properly state a claim for indirect infringement, Klausner must include some factual support that would allow this Court “to draw [a] reasonable inference that [Oracle] is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). Here, while Klausner asserts Oracle “contributed to the infringement and induced others to infringe the ‘576 Patent,” it fails to provide any factual support for these allegations."

As readers will recall, after a seven day trial, a jury in Chief Judge Davis' court found infringement of the asserted claims of the patents in this case (the issue of willfulness was bifurcated for later determination by the Court) but that the patents were invalid as anticipated and obvious.

Judge Davis denied the plaintiff's motion for judgment as a matter of law, finding after a lengthy discussion of the riveting law on corroboration that the jury's verdict was not based solely on uncorroborated oral testimony "but on sufficiently corroborated evidence" and that there was a sufficient evidentiary basis and substantial evidence to support the jury’s verdict that the asserted claims of the patents-in-suit are invalid as anticipated and as obvious. He also denied CEATS' motion for new trial.

Holding: Motions to Dismiss for Improper Joinder or Sever GRANTED in part

This is the opinion everyone has been waiting for - a comprehensive set of rulings on motions to sever in a pre-AIA case with numerous defendants added post-AIA. Eastern District of Texas Chief Judge Leonard Davis granted the motions to sever, and consolidated the actions for pretrial issues, except venue. The individual actions will remain active for venue motions and trial.

Joinder

The day before the AIA became effective, the plaintiff filed suit against two defendants. Not quite three months later it added one defendant, then six weeks after that it added 22 other defendants. The plaintiff argued that the cases were properly joined under the pre-AIA joinder law, as well as post-AIA. Judge Davis held that under both Rule 20 and the AIA, the defendants were not properly joined under the facts of the case, and accordingly severed them into separate causes of action.

Consolidation

With respect to consolidation, Judge Davis had the following to say:

This Court has limited resources and constantly strives to employ efficient and cost-saving case-management procedures for the benefit of the parties, counsel, and the Court. See WordCheck Tech, LLC v. Alt-N Techs, Ltd., No. 6:10-cv-457 (E.D. Tex. July 20, 2011) (permitting limited early discovery to facilitate early mediation discussion); Parallel Networks, LLC v. Abercrombie & Fitch, No. 6:10-cv-111 (E.D. Tex. Mar. 15, 2011) (employing an early Markman proceeding to efficiently resolve a multi-defendant case). In response to the AIA’s joinder provision, plaintiffs now serially file multiple single-defendant (or defendant group) cases involving the same underlying patents. This presents administrative challenges for the Court and, left unchecked, wastes judicial resources by requiring common issues to be addressed individually for each case. For example, what was once a single motion to substitute parties (or join a plaintiff) becomes multiple motions. See, e.g., Klausner Techs., Inc. v. The Broadvox Holding Co., LLC, No. 6:11-cv-575 (E.D. Tex. June 6, 2012) (order granting motion to substitute plaintiff—over thirty similar motions were filed in related cases). These must each be processed by the Court and staff, including review of the underlying motions and docketing individual orders addressing each motion. More substantive motions, particularly where the same arguments are used in each individual case, present even more difficulties. There, the Court is required to waste time digesting duplicate arguments to ensure that new arguments are not hidden among the plethora of common arguments.

But he noted that Federal Rule of Procedure 42 provides a mechanism for district courts to better conserve judicial resources via consolidation for certain common issues such as pretrial, Markman, or trial, observing that "[t]he Federal Circuit has recently reiterated that district courts may consolidate matters that share a common question of law or fact. See In re EMC, 677 F.3d at 1360; see also C.R. Bard, Inc. v. Med. Components, Inc., No. 2:12-cv-32-TS-EJF, slip op. at 2–3 (D. Utah July 25, 2012) (recognizing that the AIA does not affect a district court’s ability to consolidate related patent cases for pretrial matters)." Accordingly "to permit efficient case management" the Court ordered the newly severed actions consolidated with the original filed case "as to all issues, except venue, through pretrial only."

Motions to Transfer

Judge Davis then held that "[m]otions to transfer venue under 28 U.S.C. § 1404(a) will be considered only as to the defendants in the severed case, not as to all defendants in the pretrial consolidated case." But, in the event that transfer is appropriate, the Court will retain the case through the Markman phase of the proceedings. Once the Markman opinion issues, any pending orders to transfer would become effective. "This serves two important purposes," Judge Davis noted. "First, it conserves judicial resources by requiring only one district court to address the underlying disputed claim terms. The claim construction process requires a thorough understanding of the technology at issue, often demanding a substantial investment of time and energy. It does not make sense for two courts to plow the same ground. Second, this case management approach ensures that the related patent cases proceed initially on a consistent claim construction, thus avoiding inconsistent rulings." Once a case is transferred, the Court observed, of course the transferee court is not bound by the claim construction of this court, and may modify it if it believes it is appropriate. "But, much like a magistrate judge’s recommendation, it is hoped that this court’s claim construction analysis will be of help to the transferee court, whether modified or not."

The Court then had something to say about motions to transfer venue, writing that "this case management approach should not be perceived as an invitation to file motions to transfer venue. In recent years, this Court has expended considerable time addressing venue. [footnotes summarizing venue orders taking up a full page, single spaced and 10 point omitted]."

This Court has many, many issues before it—both criminal and civil—and it carries one of the heaviest patent dockets in the country; yet, venue in patent cases has increasingly become an extremely expensive and time-consuming matter, not only for the Court but for the parties as well. For instance, in a recent set of serially filed cases involving only seven defendant groups, the parties had already expended over $700,000 on venue-related discovery and briefing before the cases were even ready for status conference (i.e., before all defendants had answered the complaint). This Court currently has approximately forty pending motions to transfer venue. If the average cost of discovery and briefing for each of these transfer motions is only $300,000, then approximately $12 million is being spent by the parties on an issue that does not move the ball down the field, but only seeks a new field upon which to play. Finally, some parties have even called courts in this district to essentially “threaten” mandamus if a venue ruling is not issued within the timeframe desired by the parties. This Court manages a very busy docket—as do all courts in this district—with pending motions of varying levels of priority. Criminal cases take first priority because individuals’ freedom is at stake. In the patent context, trials and Markman hearings are a high priority. Venue motions are important, but not any more important than everything else this court has to do. The court rules on these motions as soon as it can. The Civil Justice Reform Act of 1990 was instituted to provide checks on long-pending motions and cases. Courts in this district take their cases seriously and strive to timely address pending motions in an effort to resolve cases promptly. See DIR. OF THE ADMIN. OFFICE OF THE U.S. COURTS, CJRA REPORT 27 (Sept. 30, 2011) (showing only sixteen motions pending for more than six months within the Eastern District of Texas) (available at http://www.uscourts.gov/uscourts/statistics/cjra/2011-09/CJRASep2011.pdf). This Court will address motions to transfer venue as timely as possible, while balancing the many other issues unrelated to venue requiring the court’s attention.

Trial of Severed Cases

"After the Court has issued its Claim Construction Opinion and any Transfer Orders have become effective," the Court concluded, "the Court will solicit the advice of the remaining parties on how to best structure the trial of these cases. Will there be a separate trial as to each severed defendant as to all issues? Do some defendants wish to join together in a consolidated trial? Are there some issues that should be tried first as to some or all parties, such as invalidity or inequitable conduct?" Judge Davis noted that he looks to a number of factors in determining the proper trial plan for complex multiple party and multiple issue patent cases, and while no single factor is dispositive, he has developed following the list of factors to be considered in balancing the equities to all parties involved:

(1) number of defendants;(2) number of patents;(3) number of asserted claims;(4) complexity of the technology involved;(5) similarity of functionality of accused instrumentalities;(6) consistency of plaintiff’s damages model against distinct defendants, e.g., single expert report as to all defendants, how distinct is the theory of infringement and damages in the expert report as to individual defendants, etc.;(7) consistency of defendants’ non-infringement, validity, and damages positions, as exemplified by, among other things, expert reports, e.g., single or multiple experts on non-infringement, single or multiple experts on validity, single or multiple experts on damages, etc.;(8) collaboration by defendants, e.g. joint defense groups, one firm representing multiple defendants, etc.;(9) risk of inconsistent results on common issues of fact or law;(10) risk of jury confusion;(11) cost of multiple trials to the parties;(12) the Court’s schedule and resources;(13) other individualized issues specific to a particular case.

See CEATS, Inc. v. Continental Airlines, Inc., No. 6:10-cv-120 (E.D. Tex. Feb. 14, 2012). Accordingly, all of these issues will be addressed at a later stage of case management when discovery is complete, the number of patents, claim terms and invalidity references has been narrowed, expert reports have been filed, and perhaps experts deposed, the Court noted.